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Amerisur Resources (AMER)

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Friday 23 November, 2018

Amerisur Resources

$93.25m farm-out signed with Occidental Andina

RNS Number : 2814I
Amerisur Resources PLC
23 November 2018
 

23 November 2018

 

Amerisur Resources Plc ("Amerisur" or the "Company")

 

$93.25m farm-out signed with Occidental Andina

 

Amerisur Resources Plc, the oil and gas producer and explorer focused on South America, is pleased to announce that it has entered into a farm-out agreement with Occidental Andina, LLC, an affiliate of Occidental Petroleum Corporation, an international oil and gas exploration and production company with operations in the United States, Middle East and Latin America, across the following exploration blocks: Putumayo-9, Terecay, Tacacho and Mecaya, (the "Farm-out Blocks"), all in the Putumayo region, in southern Colombia.

 

In consideration of the acquisition of a 50% interest in each block, Occidental Andina will fund a $93.25m exploration and appraisal program between 2019-2021. Occidental Andina will fund 85% of the total planned 2D seismic cost expenditure of US$65,000,000 and 100% of the US$38,000,000 planned drilling program.

 

The companies have agreed there will be a dedicated transport capacity in the OBA for the transport of oil from the Farm-out Blocks, with a commercial tariff charged for Occidental Andina's share.

 

Amerisur Exploracion Colombia, a subsidiary of the Company will be the operator of the Farm-out Blocks, which extend over 1.4 million acres and have prospective resources of 656 MMBO. The work program includes the acquisition of 878 Km of 2D Seismic and the drilling of five exploration wells.

 

Completion of this transaction is conditional on approval from the Agencia Nacional de Hidrocarburos ("ANH") and all parties will now work towards obtaining this.

 

 

John Wardle, CEO of Amerisur said:

"It gives me great pleasure to welcome Occidental Andina as our partner into these important blocks. Occidental Andina has a long and distinguished history in Colombia, with great understanding of the geological and operating environment, and an outstanding technical team with whom we enjoy a close and harmonious relationship.

 

"The farm out recognises the significant value we have created during our growth phase over the last few years and this transaction will now amply fund, widen and bring forward our exploration programmes in the Put-9, Tacacho, Terecay and Mecaya properties, which we and our new partner believe to hold very substantial resource potential. As operator, we are already working on the programmes to be executed in these blocks and expect to progress those activities in the near term."

 

Giles Clarke, Chairman of Amerisur said:

"The farm-out to Occidental Andina is a strong endorsement of the attractiveness of our acreage position in the Putumayo basin and Colombia, which we built at low cost in the oil market downturn, and the value of the OBA pipeline for the evacuation of oil from these blocks.  It accelerates our upcoming work programme while significantly reducing our future capex requirements. We have been committed to working through the social issues in the region and continue our ongoing support of the peace process.  I would like to thank our shareholders for their continued patience and support of Amerisur's growth ambitions."

 

 

ENDS

Enquiries:

 

Nick Harrison, CFO

Amerisur Resources Plc

Tel: +44 (0)330 333 8246



Billy Clegg / Georgia Edmonds / Kimberley Taylor

Tel: +44 (0)203 757 4980

Camarco


Callum Stewart / Nicholas Rhodes / Ashton Clanfield

Stifel Nicolaus Europe Limited

Tel: +44 (0)20 7710 7600



Chris Sim / Alexander Ruffman

Tel: +44 (0)207 597 4000

Investec




Paul Shackleton / Dan Gee-Summons

Arden Partners plc

Tel: +44 (0)20 7614 5900



 



 

Glossary

 

"MMBO"

millions of barrels of oil

 

"Prospective Resources"

Prospective Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations.

 

 

Notes to editors

 

About Occidental Andina

Occidental Andina LLC is a wholly owned subsidiary of Occidental Petroleum Corporation (NYSE: OXY), an international oil and gas exploration and production company, and one of the largest U.S. oil and gas companies based on equity market capitalization. An active investor in Colombia for over 40 years, Occidental is one of the largest independent oil producers in the country, with primary operations in the Llanos Norte Basin and working interests in the Middle Magdalena Basin. In partnership with Ecopetrol, Occidental operates the giant Caño Limón Field, which has produced more than 1.4 billion barrels of oil over three decades of continuous operations. The 1983 field discovery by Occidental enabled Colombia to regain its status as a net oil exporter. Occidental is committed to safeguarding the environment, protecting the safety and health of employees and neighbouring communities and upholding high standards of social responsibility throughout its worldwide operations. For more information, visit www.oxy.com.

 

About Amerisur Resources

Amerisur Resources is an independent full-cycle oil and gas company focused on South America, with assets in Colombia and Paraguay and production from two fields in Colombia. In 2016 Amerisur successfully built and is 100% owner of the strategic OBA oil transfer line into Ecuador.

 

In Colombia, the Company is operator and has a 100% working interest in the Platanillo block which includes the Platanillo producing field in the Putumayo basin, and holds a 30% non-operated working interest in the CPO-5 block containing the Mariposa-1 producing field in the Llanos basin.

 

Amerisur has a strong position in the Putumayo basin and has a cluster of near-term activity assets around the OBA export line.

 

The net book value of the Farm-out Blocks in Amerisur's accounts as at 30 June 2018 is set out in the table below:

 

Block

Effective working interest at 30 June 2018

Value

Mecaya

58%*

$0.6m

Terecay

100%

$0.1m

Tacacho

100%

$3.5m

Put-9

100%

$0.7m

 

*On 21 November 2018, Amerisur announced the increase of its working interest in the Mecaya block to 100%

 

 

These assessments are made in accordance with the standard defined in the SPE/WPC Petroleum Resources Management System (2007).

 

Competent person: Technical information in this announcement has been reviewed by John Wardle Ph.D., the Company's Chief Executive. John Wardle has 33 years' experience in the industry, having worked for BP, Britoil, Emerald Energy and Pebercan, and is a trained drilling engineer.

 

This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Company's obligations under Article 17 of that Regulation.

 

www.amerisurresources.com 


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